A Message from the China-Britain Business Council and British Chamber of Commerce in China

Following the outcome of the EU referendum, the China-Britain Business Council (CBBC) and British Chamber of Commerce in China (BritCham) remain confident about the prospects for the UK-China trade and investment relationship.

Tremendous opportunities exist for UK companies across China in a wide range of sectors. The UK remains a welcoming destination for Chinese investment. And there are ever-growing opportunities for partnerships between UK and Chinese companies around the world, not least arising from the Belt and Road initiative. CBBC and BritCham will continue to work with our members on all of these dimensions to help identify new opportunities and build upon existing links.

The success of UK companies in China is built on deep foundations of innovation and technological capacity, creative and trusted brands, and partnerships that have endured and flourished over many years. These are qualities that are respected and embraced in China, and will continue to drive business relationships long into the future.

The UK is also a long-established destination for globally-minded Chinese scholars, travellers and investors. Again the factors that drive this attraction – outstanding schools and universities, cultural heritage and storied history, corporate transparency and rule of law – remain unchanged.

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Inbound visitor statistics for April 2016

The latest available data from the International Passenger Survey is available below. This shows the volume and value of visits to the UK by overseas residents for the most recent month and quarter.

The survey is run by the Office for National Statistics (ONS) – monthly data is generally available 7 weeks after the end of each month and quarterly data is generally available 4 months after the close of each quarter. For publication dates and more information, please see about the International Passenger Survey.

Visits and spend figures


Visits: The UK recorded 3.06 million inbound visits during April 2016, 3% fewer than in the record set in April 2015 and only the second time the UK has seen over 3 million visits in April. Looking at year to date and rolling twelve months the picture is positive. In the first four months of 2016 inbound visits to the UK were 3% higher than they were during the same period in 2015 at 10.42 million visits. Growth was also a feature over the rolling twelve months to April 2016 – up 5% at 36.43 million visits.

Spending: Overseas visitors spent £1.60 billion in the UK during April 2016, on par with the same time last year. Over the first four months of 2016, visitor spending was down by 3% – driven by weaker January and March results (compared to the same months of 2015). Over the twelve months to April 2016, visitor spending was flat, just marginally south of the rolling twelve months to March record. It should be kept in mind that this data is provisional with the Office for National Statistics due to release revised Q1 data in July 2016.


Holiday visits were 18% behind April 2015 in April 2016 which might partly be due to an early Easter in March. Over the first four months of 2016 there were 3.40 million inbound visits – 4% down on the same period last year; however, up on levels recorded for the first four months until 2013. The rolling twelve month period to April 2016 showed figures slightly up 1% with 13.71 million holiday visits.

Visits to friends and relatives (VFR) fell by 4% in April 2016 compared to April 2015, with 0.87 million visits. VFR visits in the first four months of 2016 were 7% higher than the levels welcomed at the start of 2015. There were 8% more visits in the twelve months to April 2016, compared to the previous twelve month period, at 10.67 million visits.

During April 2016, business visits posted strong positive results for the third consecutive month this year – up 21% compared to April 2015. Business visits in the four months to April 2016 were up 7% compared to the same four months of the previous year. Business results to the UK for the medium term period of the rolling twelve months from May 2015 were 6% above the previous twelve month period at 9.06 million – the best ever results recorded for this journey purpose.

Miscellaneous journey purpose visits are a combination of a wide range of different journey purposes, including (but not limited to) short term study, looking for work, shopping, attending a sports event and many more. As a result monthly results tend to fluctuate. Indeed, during April 2016 visits to the UK for miscellaneous purposes were 32% higher than April last year. In the first four months of 2016 there were 0.78 million visits (9% more than the same period a year before). Miscellaneous visits to the UK were tracking 13% higher in the twelve months from May 2015 than during the previous twelve month period.

Further updates to follow …

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MSCI denies China once again

It seems China will have to wait another year and push further reforms in order to satisfy the requirements of MSCI that would allow its A-Shares to be classified as Emerging Market. Such a reclassification has been impending for years and yesterday MSCI again postponed the inevitable – awaiting increased capital market accessibility and transparency. It had seemed more likely now than in previous years considering the accelerated reforms of the past 12 months (which mollified the IMF sufficiently to include the Chinese renminbi into the SDR in November 2015).

MSCI previously specified three outstanding central criteria for China to meet before inclusion. More streamlined and predictable quota allocations expectations seem to have been met, as have clarifications regarding beneficial ownership laws which were a major concern. However, concerns still lingered around the Chinese authorities’ propensity to control their stock markets – epitomised in the 2015 crash and the suspensions of trading spanning large fractions of the Chinese market. Also concerns over the 20% monthly repatriation limit’s effects on mutual funds capacity to deal with large redemptions creates an obstacle to inclusion at present.

Such an eventual inclusion could see China mainland shares being gradually included across their emerging market indices and concurrently in ETFs / funds that benchmark against such indices. Already, despite this decision, the core MSCI emerging market index allocates 25% to Chinese shares (mostly those traded in the United States and Hong Kong) which for the world’s second largest economy is still proportionally underweight; China ‘s GDP is over 7x larger than South Korea’s which currently accounts for over 15% of the MSCI EM Index. Once inclusion is confirmed, a partial allocation of an additional 5% in China A-Shares is the more likely first step. Then following partial implementation the current roadmap estimates China’s proportion of the index increasing to around 44% under a full inclusion scenario – accounting for other expected changes such as South Korea transitioning into the developed market space.

Such a trend has already formed a (somewhat disregarded) discrepancy in China allocations between local currency and dollar denominated indices and ETFs with a number of hard currency emerging market ETFs holding less than 5% in China. Such a distortion could mean that some investors are unwittingly underweight China which adds further potential for flows into China in addition to its eventual designation of emerging market. With MSCI’s decision to postpone inclusion, China A-Shares dropped 1.1% but reversed this loss closing 1.6% stronger – with markets uncertain as to how much of this bounce was driven by Chinese authorities saving face. Such is the dichotomy in China, with its growing economic dominance tarnished by market improprieties. Nevertheless the trend of growth looks set to continue, and once China’s markets mature and it recognises the benefits associated with further integration, the world of indices and ETFs could find themselves playing catch-up.

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